FSA Investigates KDDI for its Plan To Buy JCOM Shares

The Financial Services Agency is looking into KDDI's plan to acquire a stake in Jupitar Telecommunication Co. to determine whether the deal falls under a market rule mandating a tender offer, according to Nikkei. KDDI said on Jan. 25 that it will take a stake in Japan's cable television company, known as JCOM, in mid-February. The plan call for obtaining a 37.8% interest by acquiring three firms under the umbrella of US media firm Liberty Global Inc. that each own JCOM shares. The FSA is looking at whether the deal falls under a Financial Instruments and Exchange Law provision requiring a company to conduct a tender offer when buying more than a third of the voting rights in another firm outside of the stock market. At first glance, KDDI's proposed move appears to raise no legal issues because it is not acquiring the stake directly. But some have pointed out that the telecom giant is effectively acquiring a stake exceeding one-third of the voting rights through an off-market transaction. The FSA will interview those involved in the deal to determine if it will compromise the interests of ordinary investors.